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A year after LuxLeaks, most EU countries failing to tackle tax Dodging, new report shows

Added 03 Nov 2015
Most of the EU Member States studied still provide ample opportunities for multinational corporations and wealthy individuals to dodge taxes and hide money. This has many negative impacts on citizens in the world’s poorest countries, as well as in the EU itself

Strictly embargoed to: 00:01 CET Tuesday November 3 2015

One year after the “Luxembourg Leaks” scandal revealed the shocking scale of corporate tax dodging, as well as the key role EU countries play in the problem, a new report finds that most EU countries continue to uphold secretive tax systems that are riddled with loopholes, and a wide menu of ways for companies and individuals to hide money.

Fifty Shades of Tax Dodging scrutinises the role of the EU in the global tax crisis and examines whether 15 EU countries have taken the critical steps needed to help end tax dodging. It also explores the policies of EU countries towards developing countries.

It finds that:
· A growing number of EU governments are pushing for strict confidentiality to conceal where multinationals do business and what they pay in taxes. Even France, which once demanded public access to information about what multinational corporations pay in tax, has backtracked.

· A number of EU countries still offer a diverse menu of options for concealing company ownership and laundering money. Luxembourg and Germany are the worst culprits.

· This is in sharp contrast to Denmark and Slovenia that are introducing public registers of company ownership.

· Spain remains by far the most aggressive tax treaty negotiator, and has managed to lower developing country tax rates by an average 5.4 percentage points through its tax treaties with developing countries.

· More than 100 developing countries still remain excluded from decision-making processes when global tax rules are decided. The UK and France played leading roles in blocking developing countries’ demand for a seat at the table at this year’s UN Financing for Development (FfD) summit.

Tove Ryding, coordinator of Tax Justice at the European Network on Debt and Development (Eurodad), said: “The citizens of Europe have now waited a year for the EU to get its act together and put an end to a system that allowed hundreds of multinational corporations to dodge taxes. Instead, although a few loopholes have been closed, new ones have also appeared. This report shows how inadequate the response has been so far: it’s clear that in the EU it is business as usual for multinational corporations who want to dodge the rules to lower their tax bills. The fact that the EU has failed to stop corporate tax dodging and ensure transparency has serious negative impacts on citizens in the world’s poorest countries, as well as in the EU itself.”

The report recommendations include that EU Member States and Institutions should:
· Ensure transparency, including by letting citizens get access to information about where multinational corporations do their business and how much tax they pay.

· Dismantle secrecy structures that allow anonymous company ownership and provide opportunities for money laundering.

· Give developing countries a seat at the table when global tax standards are negotiated, and refrain from lowering their tax rates through double tax treaties.

· Fix the loopholes that allow multinational corporations to lower their tax rates to extremely low levels, and don’t create new loopholes.

· Create real opportunities for developing countries to receive information from EU governments about tax dodgers who use the EU as a place to hide money from tax evasion.

ENDS

For more information, or to request an interview please contact Julia Ravenscroft, Communications Manager at Eurodad, on + 32 2 893 0854 or jravenscroft@eurodad.org.


Notes to editors:
· The full report and a briefing can be found from November 3 at www.eurodad.org/fiftyshadesoftaxdodging.

A week of action on tax justice is also taking place across Europe from November 2-6. 

This includes:
Monday November 2 – The Tax Justice Network will publish its global Financial Secrecy Index 2015 (embargoed).
Photo opportunity: On Wednesday November 4 tax justice campaigners across Europe armed with whistles and banners will take part in demonstrations to mark the first anniversary of the ‘Luxembourg Leaks’ scandal. The Brussels event will take place at 11am outside the European Commission on the Schuman roundabout.